2012 (7) TMI 352 - AT - Central Excise

Wrong availment of Cenvat credit - stay application for granting waiver of penalty - Held that - Since the appellant took wrong Cenvat credit which was reversed on 17.11.2007 it is necessary to ascertain is whether such credit was utilized by the appellant without having any other credit over and above such amount - if credit was utilized without sufficiency thereof on record penalty should be imposed if there was no utilization it is left for the adjudicating authority to re-adjudicate the matter of imposition of penalty since there is already reversal of Cenvat credit not disputed by the assessee - need to be decided afresh.

Summary

Issues involved: Stay application for waiver of penalty on the ground of wrong availment of Cenvat credit.

Analysis:
The judgment by the Appellate Tribunal CESTAT, New Delhi, involved a stay application for the waiver of a penalty imposed on the appellant for wrong availment of Cenvat credit. The appellant did not appear before the adjudicating authority to defend the case, resulting in the penalty being imposed. The adjudication order recorded that the appellant took wrong credit of Rs. 67,590 on a specific date, which was later reversed. The Tribunal emphasized the need to determine whether the wrong credit was utilized by the appellant without having sufficient credit available. If the credit was utilized without sufficient balance, a penalty should be imposed for using public funds. However, if there was no utilization, the matter of penalty imposition needed to be re-adjudicated by the authority. The Tribunal directed the adjudicating authority to grant a fair opportunity of hearing and decide the issue afresh, taking into account the reversal of Cenvat credit that was not disputed by the appellant. The judgment highlighted the importance of ensuring proper utilization of credits and the need for a thorough re-examination of the penalty issue based on the utilization of the credit in question.